BOOTHE v. TRW CREDIT DATA

This is an action for monetary and injunctive relief brought under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the Act), which permits consumer reporting agencies to furnish consumer reports only under certain specified circumstances and provides conditions of disclosure to consumers. Plaintiff, Philip Boothe, alleges that defendants, TRW Credit Data (TRW) and Fidelifacts/Metropolitan New York, Inc. (Fidelifacts), released a report concerning Mr. Boothe which contained false and defamatory information to a private investigator employed by a company with which Mr. Boothe had no business dealings, in violation of sections 604 and 607 of the Act. He also alleges that he was given false information by the defendants when he inquired about the release of the report, in violation of section 610 of the Act. Mr. Boothe claims that these actions on the part of defendants constituted an invasion of his privacy and resulted in a threat to his family's security and to his business.

Defendants moved to dismiss the complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief may be granted, on the ground that the Act does not apply to the report in question. Because both parties submitted affidavits for the court's consideration, the motion will be treated as one for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure. TRW also moved to strike the complaint on the grounds that it does not provide numbered paragraphs, pursuant to Rule 10(b), it was not signed by plaintiff's attorney of record, pursuant to Rule 11, and it so vague and ambiguous that TRW cannot reasonably be required to frame a responsive pleading, pursuant to Rule 12(e). For the reasons discussed below, defendants' motions are denied.

The following facts concerning the purpose of the investigation of Mr. Boothe which led to the release of the report in question are not in dispute. Mr. Boothe does business by mail, under the name Quality Mail Order House (Quality), from a post office box in Jamaica, New York. He offered to sell Johnny Walker Red Label Scotch to an overseas distributor which notified Distillers Ltd., the British company that produces the whiskey. Distillers Ltd. retained Edward Askew Associates, a private investigative service in London, to investigate Quality in order to find out if the whiskey Quality was offering for sale was contraband or counterfeit. Mr. Askew contacted defendant Fidelifacts in November, 1979, for information about Quality. Fidelifacts furnished Askew with the name and address of the holder of Quality's post office box, i. e., Mr. Boothe, and ordered a credit report from TRW which it forwarded to Askew.

Defendants argue that the complaint fails to state a claim upon which relief may be granted because the Act does not apply to business credit reports, but only to reports on individual consumers. They claim that the report which they made available to Mr. Askew was not a consumer report as defined by the Act because the investigation in connection with which it was released was a legitimate, good faith investigation of Mr. Boothe's business, unconnected to any consumer credit transaction.

The Act defines "consumer report" as:

any written oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for 1) credit or insurance to be used primarily for personal, family, or household purposes, or 2) employment purposes, or 3) other purposes authorized under section 1681b of this title.

15 U.S.C. § 1681a(d). Whether a report collected and released by a consumer reporting agency constitutes a "consumer report" under the Act, then, depends on the contents of the report and the purpose of the report. If the purpose of the report is not among the enumerated purposes which define "consumer report," the Act does not provide protection to the consumer.

It is clear from its legislative history that the Act was intended to apply only to reports which relate to the consumer's eligibility for personal credit or other commercial benefits as a consumer, and not to the consumer's business transactions. The statement of the Fair Credit Reporting Bill's House sponsor, Representative Sullivan, sets forth the concern of Congress in passing the statute.

The purpose of the Fair Credit Reporting Bill is to protect consumers from inaccurate or arbitrary information in a consumer report which is used as a factor in determining an individual's eligibility for credit, insurance or employment. It does not apply to reports used for business, commercial or professional purposes.

The report in the instant case can be distinguished from those in the cases cited above because Mr. Boothe claims that it was collected and maintained for the purposes listed in section 1681a(d), rather than in connection with his business. The purpose of the investigation in connection with which the report was released does not by itself determine whether the report is a "consumer report," as defendants suggest. It is true that if the report was compiled solely for the purpose of aiding in an investigation of a consumer's business or for determining a consumer's eligibility for commercial credit, it is not a consumer report, even if it contains information about the consumer. Sizemore v. Bambi Leasing Corp., supra; Wrigley v. Dun & Bradstreet, supra. However, if the report was collected for one of the purposes listed in section 1681a(d), it is a consumer report, regardless of the reason for which it is subsequently disseminated. Thus, the proper focus for determining whether a report falls under the Act's definition of consumer report is the purpose for which it was collected, and not solely the purpose for which it was released.

Defendants would have this court hold that the release of a consumer report to a third party for a purpose not permitted by the Act converts the report into one outside the scope of the Act. Such a holding would render section 1681b, which restricts the release of consumer reports to certain specified circumstances, totally ineffective. The Act applies when the information in question was collected for one of the purposes provided ...

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